Keys to Future of FM: Energy Management

It is inevitable that FM companies need to undergo business transformation to stay relevant in the midst of fast changing competitive landscape and evolving technologies. FM companies with business-as-usual service propositions will risk losing out in the marketplace.

In the wake of digital revolution across industries, the global FM market is already witnessing multiple partnerships and mergers and acquisitions (M&As). Most, if not all, of these consolidations are due to the propulsion of one or more of these three business themes: energy management (EM), digitalization, and workplace management. This article touches on EM.

Currently, EM of buildings is the talk of town. Almost every participant in the buildings value chain is involved in EM products and services, or advocating the importance of EM. As such, the EM trend has been encircling FM companies who are the operations and maintenance (O&M) professionals of post-construction facilities and buildings. Sensor, control, and monitoring technologies are the simplest and most common EM solutions for energy efficiency and automation improvements. FM companies, especially integrated FM (IFM) ones, have long realized the value add of EM services and are already dispensing a variety of EM solutions to customers.

As buildings are getting smarter and greener, so are occupants in the buildings. The growing awareness of environmental sustainability by Asian governments may bring a better regulated EM market in the future. Furthermore, a well-regulated EM market leads to compulsory certification of energy services companies (ESCOs) by local authorities. Only a few FM companies are certified ESCOs; for instance, Engie and CBM are certified ESCOs in Singapore, and Cofreth in Malaysia. In other words, conventional FM companies offering value add energy efficiency solutions will continue to face tough competition from certified ESCOs who are providing comprehensive EM solutions from audits to monitoring and performance guarantees.

On the other hand, digitalization in many markets means that EM services are advancing to unprecedented new levels that require sophistication and innovation in business models and technology. No longer is EM about energy savings only; it will be about how improved EM can result in the advancement of one or more other touchstones for end-users: business productivity, data for decision making, and successful performance contracting. While performance contracting is predominantly the core competency for ESCOs, FM companies must develop the capability to assist companies in achieving not only its return on investments (ROI) in EM projects but also improve business productivity and utilize information technologies.

In other words, FM companies that proliferate in providing successful and proven EM solutions must be able to reinvest energy cost savings to improve its customers’ business processes, corporate culture, and new infrastructure development. These can be achieved by leveraging digital platforms such as cloud, fog, or edge computing, for instantaneous decision making based on valid data.

The roles of FM companies in EM of building industry are immense in the future. An FM company is in a unique position whereby it has the capability to encompass a myriad of building solutions and business processes. FM companies at its core are knowledgeable in building mechanical and electrical services. FM companies know buildings better than cloud solution providers and software providers; FM companies have the competency to expand into ESCO spaces. With the leverage of digital platforms, an FM company that is willing to change and reinvent itself stands a greater chance for a place in the future of FM.

Melvin Leong Associate Director, Frost & Sullivan, APAC. Melvin is based out of Malaysia and can be reached at melvin.leong@frost.com